BankservAfrica drives SA’s digital identity creation

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Martin Grunewald, chief business officer at BankservAfrica.
Martin Grunewald, chief business officer at BankservAfrica.

South Africa is on track to creating a single digital identity that will simplify the identification process and help remove barriers to participation in the digital economy.

Africa’s largest automated payments clearing house BankservAfrica says it is working with banks, regulators, and the financial and payments industry to create the digital ID, saying it is a “journey and will evolve with the industry”.

“We’re on the road to creating a single digital identity that individuals own and trust, and can be used widely by banks, government, businesses and other interested organisations,” says Martin Grunewald, chief business officer at BankservAfrica.

The current development comes on the back of fierce criticism that SA is missing out on the infinite opportunities presented by the mass adoption of a digital identification (ID) system, or eID.

Perceived as one of the most significant technology trends of 2020, a digital ID is a legal biometrics-based equivalent of an individual's identity card, which can be used to prove an individual's identity and verify their profession, providing them the right to access information or services online or physically.

Today, more than 70 countries have set up a national eID scheme in an effort to digitise government services for citizens, while seamlessly enabling access to private sector services, such as insurance, banking, travel and healthcare.

BankservAfrica says the country cannot afford to miss out on the growing global trend.

“South Africa cannot be left behind in this digital ID journey. Already, there have been successful advancements over the years for innovating in this space by some of the banks and organisations that conceived their own customised solutions to prompt faster and enhanced services to clients in their respective industries,” says Grunewald.

Global phenomena

“Digital ID is recognised as a worldwide need for countries across the globe regardless of their economic standing. Investment and efforts are ramping up in countries such as Canada and Australia for these systems.

“The World Bank’s Identification for Development Initiative stepped up the call ‘to prioritise the development of inclusive and trusted digital ID systems as part of a resilient recovery from COVID-19’ in October last year”.

Grunewald explains that digital ID has long been viewed as the answer for banks as proof of identity for compliance and regulatory reasons, such as FICA and know your customer. “This is where our involvement in digital ID began – and remains for supporting our banking customers and the industry in the development of an agreed digital identity solution.

“This brings the need to establish a standard industry mechanism with digital identifiers that individuals own. These would not belong to a single institution like a bank or a hospital, but be developed for the individual who would take complete ownership.”

Moving forward, he says, the first step to agree and gain a common understanding with the South African community on what digital ID represents for them, and in their own respective industry.

“We need to align on these before we can create a supporting digital ID governance framework of accepted industry standards for expressing, exchanging and verifying digital credentials to create reliability, trust and security.

“Individuals will authenticate themselves using decentralised identifiers – a unique identifier with verifiable data. These are generated and registered cryptographically and are highly encrypted for individuals to own and to keep secure and private.”

Security bother

The issue of security has also been the subject of recent discussions on digital IDs.

Various key industry role-players recently cautioned that COVID-19 has inadvertently created an environment that is fertile ground for online fraudsters, looking to exploit unsuspecting consumers.

They warned that not only has the pandemic driven more people online, consumers are now also more cash-strapped, making them more susceptible to online scams.

Momentum financial adviser Janine Horn noted that a 2020 TransUnion survey revealed 38% of local consumers had been a target of digital fraud related to COVID-19, with 5% having paid the price for their lack of awareness.

“The ploys of these online fraudsters are becoming incredibly difficult to detect, and so are their agendas. It’s no longer simple financial fraud – this new wave of online scamming now encompasses identity theft, voter manipulation, misuse of personal data – and everything in between,” she said.

“We are all potential victims and should not think that we are not the targets of these attacks. With the amount of data cyber criminals can obtain from a quick Google search, you’ll be surprised at how easily you can be duped.”

Gur Geva, founder and CEO of iiDENTIFii, a digital identity artificial intelligence firm, also warned that in the increasingly online world, identify theft is a lucrative activity at the root of much organised crime.

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